Siemens Energy Soaring High: A Winning Quarter for the Energy Giant
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Robust Q1 Performance Boosts Siemens Energy's Progression - Robust Q4 Performance Propels Siemens Energy Upwards
It's looking good for Siemens Energy. After leaving the shackles of the recent troubled years, the energy conglomerate is set for a stellar year. As per CEO Christian Bruch, the company's latest quarter - a record-breaker since its independence - saw a substantial, tax-adjusted profit of 501 million euros, a remarkable jump from the previous year's quarter. Although the beleaguered subsidiary, Siemens Gamesa, still causes a stir, other divisions are performing outstandingly well, causing the company to significantly reevaluate its forecast. Even the U.S. tariffs barely make a dent.
"A pain, but manageable" is how the CEO describes the potential impact of the tariffs. The company estimates the remaining tariff burden for the fiscal year to be a high double-digit million-euro sum. Compared to recent tariff predictions made by German auto manufacturers, this is relatively insignificant. These setbacks are easily overshadowed by the recent growth momentum.
Boom Times
This growth was visibly reflected in the second quarter's revenue and order intake. Revenue spiked by nearly 20% to almost 10 billion euros, while order intake surged not only above that but also grew by more than 50% to 14.4 billion euros.
CEO Bruch refers to it as an "order boom." He attributes this to the rising demand for electricity. This impressive growth led him to raise the forecast - from a projected break-even point to a potential net income of up to 1 billion euros. "Our confidence in the sustained market opportunities and our excellent project execution" led to this improved outlook, Bruch said.
In the past, issues with individual projects, particularly at Gamesa, had affected the entire company's performance. However, Energy is confident that it has now taken control of these problems.
Gamesa's Upheavals Continue
While Gamesa's troubles are far from over, the company's strong results in turbine and maintenance businesses, as well as power grid technology, managed to offset the significant loss incurred within Gamesa's segment in the second quarter. Although challenges persist with two crucial onshore wind turbine types, the company anticipates reaching the break-even point for these areas in the next year. If all goes well with other divisions, Energy could reach new heights in earnings.
First Things First
Before reaching these lofty heights, the company must meet its current forecast. If it does, it won't be the first annual profit for Siemens Energy since it spun off in the fall of 2020 - that happened last year, but mostly due to gains from the sale of shares in Siemens India. This time, it would be entirely self-generated.
into Dividend Landscape
Despite the impressive development, shareholders won't be receiving a dividend for the current fiscal year, Bruch clarifies. The reason for this is the state guarantees that the company received two years ago to secure its full order book. Although the company projects itself on track to shed these guarantees during the course of the fiscal year, as CFO Maria Ferraro explains, Energy may only pay a dividend for the earnings generated in the following year, which could reach shareholders as early as 2027.
Despite this, shareholders have reasons to be joyful, as evident on Thursday, when Siemens Energy made a strong showing on the stock exchange.
- Siemens Energy
- Gamesa
- Christian Bruch
- Munich
- Siemens AG
- CEO
- "Despite the focus on Gamesa's ongoing challenges, the significant growth in Siemens Energy's turbine, maintenance, and power grid technology businesses suggests a possible shift in the community policy, favoring investment in advanced technology and renewable energy."
- "As Siemens Energy soars high with impressive revenue and order intake figures, the future looks bright for the energy conglomerate, promising continued growth in the renewable energy sector and potential dividends for shareholders in the coming years."
